Bank acknowledges "technical breach" of Consumer Credit Act

Shares

The Co-operative Bank has announced its financial results for 2013, declaring a pre-tax annual loss loss of $2.18 (£1.3) billion.

The losses follow the emergence of a $2.18 (£1.3) billion black hole in the bank's balance sheet last year and are exacerbated by its need to raise $669 million (£400 million) to cover the costs for technical non-compliance to the Consumer Credit Act.

It was reported last month that the Co-operative Bank had identified a batch of loans for which it had issued statements three days late. The error was apparently the result of a human computer programming mistake and constitutes a breach of the Consumer Credit Act.

"Non-compliance"

In a statement announcing its results, the Co-operative Bank said: "While the Bank has identified certain instances where its documentation or processes have not been fully compliant with the technical requirements, there may be other instances of non-compliance which have not yet been identified."

"The consequences of non-compliance with the Consumer Credit Act can include interest and default charges paid by a customer in prior periods being required to be refunded and the customer agreement not being enforceable by the Bank without a court order until the breach is remedied."

Chief Executive Niall Booker apologized to the bank's customers and stakeholders about its performance. "We are determined to rebuild trust in the Bank after the events of last year and reward the loyalty our customers and shareholders have shown us," said Booker.